Examples of LLCs: 8 renowned LLCs

Establishing LLC becomes flexible, offers protection of liability among other strategic advantages and that is why even big corporations use this structure. We shall have a closer look at some of the most prominent examples.

1. Google LLC

Google is an LLC of its parent company, Alphabet Inc. Google LLC is a holding company of all other internet related ventures and subsidiaries of Alphabet.

2. Berkshire Hathaway

Even though Berkshire Hathaway, in its turn, is a corporation, it holds several subsidiary LLCs such as BHH Affiliates LLC that specializes in the real estate investment and operations.

3. ExxonMobil Sales and Supply LLC

ExxonMobil is one of the biggest oil companies in the world, which has its subsidiaries such as the ExxonMobil Sales and Supply LLC. It is a subsidiary that deals with oil supply and distribution and enjoys the liability protection and flexibility of operations that are afforded by LLC.

4. Johnson & Johnson LLC

The company is a Johnson and Johnson LLC subsidiary. It deals with wholesale distribution of surgery and medical equipment.

5. Amazon.com Services LLC

Amazon, being mostly a corporation, also operates with the LLCs. Amazon.com Services LLC deals with services in electronics and appliances that allow separating liabilities and simplifying the process of operations.

6. Sony interactive entertainment Ltd

The Sony group corporation has various subsidiaries such as Sony Interactive Entertainment LLC that deal with video games and digital entertainment.

7. IBM Credit LLC

IBM is an IT solutions and computer company with IBM credit LLC, which is a subsidiary that offers credit facilities on IBM products and services.

8. Anheuser-Busch Companies LLC

Anheuser-Busch, a company that is known to sell beers all over the world, has a subsidiary known as Anheuser-Busch Companies LLC. This LLC has 12 breweries in the U.S. that yield about more than 15 billion a year.

Why Large Companies Use LLCs

Small businesses are not the only ones who can use LLCs. Big companies use LLCs because of their flexibility of operation, tax advantages and protection of liability. Here's why:

Minimal complexity of Administration

The creation of LLC is relatively simple and less costly than when forming a corporation. LLCs do not have to have a board of directors or have annual meetings. Whereas most states compel LLCs to submit annual reports, the reports are typically not as complicated as corporate reporting.

Control

Members of LLC are in direct control of company operations. They do not have to report to a board of directors as it is the case in corporations. This control enables the members to organize the management and decision making processes to suit their needs.

Limited Personal Liability

The LLCs and corporations offer similar protection of personal liability, i.e. the owners are not part of the business. Protections are normally given to personal property except when the owner personally guarantees a loan or commits an illegal or negligent act. On the contrary, in a sole proprietorship, the owner is also personally liable to all business requirements.

Tax Flexibility

LLCs are technically pass-through in nature, which implies that the profit is reflected in the personal tax returns of the members. The single member LLCs are taxed as sole proprietorships and the multi-member LLCs are taxed as partnerships. Nevertheless, LLCs have an option of being taxed as either a C-Corporation or S-Corporation provided that it has financial benefits.

C-Corporations are taxed at a lower rate compared to individual income tax, distributions made to the shareholders are taxed on two occasions. The members of LLC are also taxed on self-employment incomes except when the LLC is taxed as corporation. Under S-Corp taxation, the members do not pay self-employment taxes on their salaries but this requires extra accounting and payroll.

Profit-Sharing Flexibility

In contrast to corporations, where members pay dividends based on the percentage of ownership, LLCs enable members to establish their own profit-sharing practices in the operating agreement. This allows allocations to be made on a contribution or effort basis or role in day to day operations instead of being limited to a certain percentage ownership.

Conclusion

To conclude, LLCs represent a flexible and well-planned business model applied by both startup and multinational corporations. They provide an asset protection of both the element of liability, tax flexibility, control over its operations, and independent freedom of its profits that is attractive both to small and large business.